Transform or disappear, the Darwinism of IT: In order to adapt to a digital world, a two-speed IT is needed.
Despite the importance of IT in today’s digital world, Chief Information Officers (CIOs) often struggle to get their voices heard by executive committees.
Faced with this challenge, IT departments are being forced to reinvent themselves to adapt their companies to the fast paced evolution of technology. The Boston Consulting Group has developed a business approach that allows IT to shed off its appearance of a heavy cost center and to adopt a new, more realistic persona as a quality service provider, partnering with users and the management.
Would you be a professional, a student in engineering, a student in a business schools or would you just be interested in digital transformation and its implications on IT, Learn with three BCG experts why and how to manage an IT department as a business in order to transform a company and adapt it to a digital world.
Join the conversation: #2SpeedIT

Vanessa Lyon

Eric Baudson

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[MUSIC] Hello, everyone. I'm happy to be with you today to share my view on how I feel IT should be managed as a business domain. So what I find fascinating about IT as a domain is that it has its own specific dynamics. Domain where the value chain is deconstructing every now and then, and you have giants disappearing, new giants rise. A little bit like in the evolution theory, where Darwin said that the species are to transform, and to evolve, and to adapt. Actually, IT is a fairly recent domain, they only stated 50 years ago. Do you know that the space shuttle that landed on the moon in 1969 had a computer with a memory of 32 kilobytes, when an iPad today has 32 gigabytes, meaning it has a memory one million times bigger than that space shuttle. Do you know that if you adapt the sum of the memory of the computers on the planet in 1975, you have less than what you can find today on a computer you buy for $500. So what's behind that? Actually, you have three laws that are underlying and specific to the IT domain. The first one is the Moore Law. That will tell you that the computing power will double every two years. The second one is about increasing returns. In many industries, you have decreasing returns. In IT, it happens that you create a software, you invest, you spend the time, and then you can sell it, 1,000, one million, one billion times, for zero extra marginal cost. The third law is around the network effects. Actually, everybody knows that network is critical to the IT domain. You can see it every day. And the value of the network is proportional to the square value of the number of users. Those three mathematical laws happen to be divergent laws. They explain the exponential growth of IT. It is a domain where you can and you have to grow as fast and as big as you can, so that you can establish a situation where you will be the leader and the winner takes it all. You've established your network, everybody is in your network, so there is no reason why they should change. That's the reason why that industry has generated so large players. Today, if you look at the top ten players on the IT market, their total capitalization add up to more than the GDP of Indonesia, which is a country that has 215 million inhabitants. Can you believe that? So what do you do when you are confronted to a gigantic player? In that industry, you innovate. You can create an alternative technology and then turn it to visage. You can benefit from an alternative trend because the pace of technology evolution is going so fast, and then you raise yourself and you can become big yourself. So either you are a big dinosaur and you try to adapt and you innovate yourself to survive, or you get hit by the comet and you have another species who's biding their time and who is becoming a giant. The players of today may remain the players of tomorrow, but maybe they will change. So what's for the CIO? How can you survive in that environment? How can you decide? How can you be sure that the choices he makes today will be the right choices for tomorrow? In the following videos, together with and some guest speakers, we will share with you some thoughts, some tips and tricks, on how to manage your IT as a function, how to make the right choices, how to adapt to this changing environment.